RMB revaluation expectation drove HSI above

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					                            EAST ASIA SECURITIES COMPANY LIMITED
                            9/F, 10 Des Voeux Road Central, Hong Kong.
                            Dealing: 3608 8000 Research: 3608 8097 Facsimile: 3608 6113
                                                                                                                                           HONG KONG RESEARCH
 Restricted circulation                                                                                                                          Weekly Report
                                                                                                                                                   th
 Analyst: Paul Sham                                                                                                                               9 April 2010



                                    HSI Weekly Movement                                                                  Weekly Market Statistics
                      270                                                23,000                      eek
                                                                                                    W ended                      09/4/2010   01/4/2010 Change    %

                      240                                                                           Hang Seng Index               22,209     21,537    +672     +3.1%
                                                                 22,209 22,500
                      210                  21,929         21,867                                    HS Red Chip Index              4,238      4,164     +74     +1.8%
                                                                         22,000
                            21,537                                                                  HS China Enterprises Index    13,047     12,696    +351     +2.8%
                      180
                                                                         21,500



                                                                                  Hang Seng Index
  Turnover (HK$ bn)




                                                                                                    HS Hong Kong 35 Index          2,293      2,249     +44     +1.9%
                      150
                                                                         21,000                     HS Mainland 100 Index          7,207      6,988    +219     +3.1%
                      120            H      H
                                     o      o    89.11                   20,500                     Growth Enterprise Index        856         844      +12     +1.4%
                      90 69.32       l      l             70.15 76.17                               Avg Daily Turnover             78.5       63.5      +15     +23.7%
                                     i      i                            20,000                     (HK$ bn )
                      60
                                     d      d
                                     a      a                            19,500                     Sectoral Indices
                      30
                                     y      y                                                       Finance                       33,480     32,400   +1,079    +3.3%
                       0                                                 19,000                     Utilities                     40,562     39,932    +631     +1.6%
                            1-Apr    Mon   Tue      Wed    Thu     Fri                              Properties                    28,881     28,684    +197     +0.7%
                               Turnover               Hang Seng Index                               Comm& Ind                     12,086     11,644    +441     +3.8%


Review & Outlook of Market Performance

In a week shortened to only 3 trading days due to local holidays, Hong Kong stock market extended its
winning streak for the second week. The local bourse started the week with a 1.82% gain on easing
concerns over a possible interest rate hike in the US as well as market talks of Renminbi appreciation.
Better-than-expected US retail sales data that reflected a bounce in consumer demand also helped
fuel the market sentiment. Investors defied adverse news such as increasing likelihood that the
Greece might default its national debt within the year and the implementation of property tax by the
Chinese government in certain cities. Over the week, the HSI gained 672 points or 3.1% to close at
22,208.50. Trading was hectic this week, with average daily turnover reaching HK$78.5 billion,
compared with HK$63.5 billion in the previous week.
Policy on RMB revaluation was under the spotlight this week. A shift in Beijing's exchange rate policy
might be imminent as the US Treasury Secretary Timothy Geithner made a lightning visit to Beijing on
Thursday to meet the Vice Premier Wang Qishan, before the top-level meeting between President Hu
jintao and Obama next week. The arrangement triggered market speculation that policymakers were
prepared to allow the value of RMB to rise. On the other hand, the New York Times reported China
was close to announcing a shift in policy involving a “small but immediate” RMB revaluation, adding to
speculation the PRC government was set to let RMB appreciate. As a result, speculation about a
firmer Chinese currency drove Renminbi 12-month forwards to trade near an 11-week high, pricing in
a 2.9% rise on its spot price against the greenback.
A number of US corporates will announce their quarterly earnings next week. The market will closely
watch their results, as it will give a clearer lead on US recovery progress. Sentiment should remain
supportive and may be boosted higher before any profit-taking and consolidation. We see good
support of the HSI at 22,000.


This report has been prepared solely for information purposes and we are not soliciting any action based upon it.
Neither this document nor its contents shall be construed as an offer, invitation, advertisement, inducement or
representation of any kind or form whatsoever. The information is based upon information, which we consider
reliable, but accuracy or completeness is not guaranteed. Opinions expressed herein are subject to change without
notice. At time of this report, East Asia Securities Company Limited has no position in securities of the company or
companies mentioned herein, while its group companies may from time to time have interests in securities of the
company or companies mentioned herein.
             EAST ASIA SECURITIES COMPANY LIMITED


US & Regional Markets Weekly Update
Date                   US            US            JAPAN          SINGAPORE        MALAYSIA     BANGKOK         TAIPEI
                    Dow Jones      NASDAQ        Nikkei Avg           STI          KLSE Index   SET Index   Weighted Index

9th April           10,927.07*     2,436.81*     11,204.34         2,971.97         1,333.98     789.66        8,092.03
1st April           10,856.63      2,397.96      11,244.40         2,933.96         1,331.47     801.32        8,013.09
Change             +70.44         +38.85           -40.06           +38.01           +2.51       -11.66        +78.94
%                  +0.6%          +1.6%            -0.4%            +1.3%            +0.2%       -1.5%         +1.0%
                            th
Remarks: (*) closing as of 8 April 2010
                                                                              th
Major Changes in Index Constituent Stocks (Week ended 9 April 2010)
Hang Seng Index (HSI)
            Stock          Stock Closing Price         W-O-W Change                       Remarks / Comments
                           Code @09/04/2010
                                                     Absolute          %
 Chalco                    02600       HK$8.90       +HK$0.78        +9.61%    Shares of resource and metal
                                                                               industries, as well as sectors that
                                                                               closely linked to the business cycle,
 China Shenhua             01088      HK$36.75       +HK$2.30        +6.68%
                                                                               climbed on hopes of mounting demand
 Energy
                                                                               as the economy continued to show
                                                                               more signs of recovery.

Hang Seng China Enterprises Index (HSCEI)
            Stock          Stock Closing Price         W-O-W Change                       Remarks / Comments
                           Code @09/04/2010
                                                     Absolute          %
 China Construction 00939              HK$6.86       +HK$0.36        +5.54%    It was reported China Construction
 Bank                                                                          Bank planned to sell shares to raise
                                                                               about RMB75 billion of capital this year.
                                                                               The news helped remove the fund-
                                                                               raising risk for the nation’s second
                                                                               largest lender.

Hang Seng China-Affiliated Corporations Index (HSCCI)
            Stock          Stock Closing Price         W-O-W Change                       Remarks / Comments
                           Code @09/04/2010
                                                     Absolute           %
 Franshion                 00817       HK$2.49       -HK$0.15        -5.68%    Chinese developers bucked the market
 Properties                                                                    upward trend as the PRC government is
                                                                               set to impose a property tax as a means
 China Overseas            00688      HK$17.30       -HK$0.62        -3.46%    to cool the bubbling property market,
                                                                               with Shanghai, Beijing, Shenzhen and
                                                                               Chongqing as pilot cities.




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        EAST ASIA SECURITIES COMPANY LIMITED

Summary of US Economic News
Indicator                            Change/Index                           Comments
ISM Non-Mfg Index                        55.4            The ISM's non-manufacturing index began to
   – March 2010                                          match the step of the manufacturing sector. The
                                                         reading       showed       solid   month-on-month
                                                         acceleration at 55.4 in March, which was the third
                                                         month of growth in a row.
Pending Home Sales Index                   +8.2%         Pending sales for existing homes jumped 8.2
  – February 2010                                        percent in February indicating growing strength in
                                                         the housing sector ahead of April-stimulus
                                                         expiration.
FOMC Minutes                                 -           FOMC participants believed that the economy was
                                                         slowly strengthening but a number of factors are
                                                         likely to restrain the pace of recovery. These
                                                         include waning effects from fiscal stimulus,
                                                         inventory rebalancing, weak labor market
                                                         conditions, tight credit, lower housing wealth, and
                                                         modest income growth.
Initial jobless claims                 +18,000           Initial jobless claims surged 18,000 to 460,000,
                     rd
    – week ended 3 April 2010                            failing market expectation of a drop to 435,000.

Forthcoming Important Announcements / Events
  th
12 April 2010 (Monday)          HK     :    Geely Automobile (00175) – final results
                                            Glorious Property (00845) – final results
                                            Longfor Properties (00960) – final results
                                            China Southern Airlines (01055) – final results
                                            China Communications Construction (01800) – final results
                                            Evergrande Real Estate (03333) – final results
                                US     :    Treasury Budget – March 2010
                                            ALCOA – Q1 2010 results
  th
13 April 2010(Tuesday)          HK     :    Dongfeng Motor (00489) – final results
                                            Shimao Property (00813) – final results
                                            China Merchants Bank (03968) – final results
                                US     :    International Trade – February 2010
                                            Intel – Q1 2010 results
  th
14 April 2010 (Wednesday)       HK     :    BaWang International (01338) – final results
                                            PICC Property and Casualty (02328) – final results
                                US     :    Retail Sales – March 2010
                                            Consumer Price Index – March 2010
                                            JPMorgan Chase – Q1 2010 results
  th
15 April 2010 (Thursday)        HK     :    Shui On Land (00272) – final results
                                            Fushan International (00639) – final results
                                            Foxconn International (02038) – final results
                                                                                       th
                                US     :    Initial jobless claims – the week ended 10 April 2010
                                            Industrial Production – March 2010
                                            Housing Market Index – April 2010
                                            Google – Q1 2010 results
  th
16 April 2010 (Friday)          HK     :    Ping An Insurance (02318) – final results
                                            China Power International (02380) – final results
                                            China Pacific Insurance (02601) – final results
                                            China National Building Material (03323) – final results
                                US     :    Housing Starts – March 2010
                                            Consumer Sentiment – April 2010
                                            Bank of America – Q1 2010 results
                                            General Electric – Q1 2010 results




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         EAST ASIA SECURITIES COMPANY LIMITED

Important Disclosure / Analyst Certification / Disclaimer

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The Bank of East Asia, Limited (BEA).

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This report has been prepared solely for information purposes and has no intention whatsoever to
solicit any action based upon it. Neither this report nor its contents shall be construed as an offer,
invitation, advertisement, inducement or representation of any kind or form whatsoever. The
information is based upon information, which East Asia Securities Company Limited considers reliable,
but accuracy or completeness is not guaranteed. Information and opinions expressed herein reflect a
judgment as of the date of this document and are subject to change without notice. Any
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Description: RMB revaluation expectation drove HSI above